Windsor Auditor General's action plan never made public

Dave Battagello, The Windsor Star02.13.2012

Fired city auditor general Todd Langlois claims mayor Eddie Francis, left, didn't act on his concerns suggesting Max Zalev, right, chairman of the city’s audit committee, was trying to stonewall attempts to make his action plan public. Langlois also told the mayor that Zalev, as CEO of Enwin — one of the agencies that would be subject to a review by the auditor general — was “clearly in a conflict of interest position.”File photos
/ The Windsor Star

Fired city of Windsor auditor general Todd Langlois takes part in a press conference at the office of his lawyer James Cooke in Windsor on Friday, February 3, 2012.Tyler Brownbridge
/ The Windsor Star

The city’s auditor general was fired 13 days after he filed a three-year work plan that called for a wide-ranging investigation of municipal departments and agencies.

In a Jan. 18 report to the city’s audit committee, Todd Langlois laid out an ambitious review of 28 areas at city hall beginning this year. The review would have looked at operations involving Enwin, the Windsor Utilities Commission, Windsor Airport, social services, the city treasurer’s office, the tunnel corporation and the WFCU Centre, among others.

The report also called for a risk assessment of the $78-million downtown aquatic centre.

But the report, a copy of which was obtained by The Star, never saw the light of day.

“I don’t think they ever wanted an auditor general’s office,” Langlois said in an interview. “I don’t think there was any intention to ever allow me or this office to succeed. It was all for the optics.”

The auditor general’s desire to dig into so many high-profile, municipal entities was done in the public interest based on the fact they had large budgets and carried heavy risk for taxpayers, Langlois said.

“These are all areas never looked at before. They are areas that deserve attention because of the money involved,” he said.

“I’m not there to please everybody and look at what they want me to look at. They kept trying to steer me away from things that are important.

They kept saying it’s too premature to look at the aquatic centre. Well, no it’s not. I was doing what I was hired to do and that’s protect taxpayers. By holding council and administration responsible, I was doing what I was paid to do.”

On Jan. 23, eight days before he was fired, Langlois raised concerns to Mayor Eddie Francis in an email, suggesting Max Zalev, chairman of the city’s audit committee, was trying to stonewall attempts to make his action plan public.

Langlois told the mayor that Zalev, as CEO of Enwin — one of the agencies that would be subject to a review by the auditor general — was “clearly in a conflict of interest position.”

“Based on the recent actions, I plan to write a public report as such and make some recommendations,” he said in an email obtained by The Star.

Francis summoned Langlois to his office after receiving the email, leading to what both described as a heated discussion.

In an interview Friday, Francis said Langlois was not happy after learning he would not intervene in the affairs of the audit committee.

“I told him I don’t want to get involved in audit committee stuff and (for him) to deal with the clerk,” Francis said.

“At that meeting before we even started he was venting. It was the first time he said to me he thought (Zalev) was in conflict. I said to him if you feel that strongly I will take it to council and have Max removed from the committee.”

Francis claims he received an email from Langlois on Jan. 24 asking him to hold off on taking the Zalev conflict issue to council until after the audit committee meeting.

The issue of Zalev possibly being in a conflict on the audit committee has come up at council when making committee appointments.

“We just appoint the members, but it is the committee themselves who chose the chairman,” Francis said. “We knew at council (Zalev) has a lot of experience on the committee and wanted to keep him there for continuity. (Langlois) never expressed anything about Max to me until a couple of weeks ago.”

Also on Jan. 23, Langlois emailed Bill Carter, vice-chairman of the audit committee, complaining that Zalev was taking a “hard line” by insisting that a planned meeting that week not include a public discussion of his three-year work plan.

Langlois told Carter he was dismayed the conflict situation involving Zalev was never addressed, even though he mentioned it as a problem to the mayor and CAO Helga Reidel.

“I am clearly frustrated at the lack of support for the function,” Langlois wrote in his email. “I want to get into the audits that I was hired to do; yet, more blockades. Tone at the top is as weak as I have ever seen. Lack of co-operation is unprecedented.”

Langlois said there was a “complete lack of support” for an independent auditor general. “The resistance throughout sure raises a red flag.”

He also vowed to blow the whistle to “an outside body to deal with this unfortunate situation (the province perhaps).”

Carter, who is on vacation in Florida, could not be reached for comment despite several attempts Thursday and Friday.

Langlois in his interview with The Star, said he felt Zalev’s position as chair of the audit committee and CEO of Enwin presented a “huge” conflict.

“It’s not just blocking a look at Enwin, but you can make the office inefficient so you never get in there. There are just so many ways to do that and clearly it succeeded.”

Contacted this week, Zalev said he stands behind his actions, maintaining the firing of Langlois has nothing to do with the aggressive work plan to shine the spotlight on key municipal entities.

“No, categorically, no,” he said in an interview with The Star. “The work plan wasn’t related at all. It’s a personnel issue, but it wasn’t the work plan.”

Zalev refused to detail what led to the firing of Langlois.

“The reason I won’t comment simply put is they are contemplating litigation,” he said. “I’m not going to add fodder for somebody who has a potential claim against the city.

“The decision made by council was based on appropriate information. There certainly was a situation that wasn’t working between the corporation and auditor general. I’m not able to speak about it.”

The mayor said he first saw the work plan when Langlois came to meet him in his office on Jan. 17.

“He said here it is and I told him it was not appropriate and give it to the audit committee,” Francis said.

Discussions about terminating Langlois had started long before then, the mayor said.

“He was not terminated because of the work plan,” Francis said. “It had nothing to do with it. I will take the same plan, take (the city audit function) to an RFP and them let them work on it.

“This had no connection to the work plan whatsoever. Some people had reservations about his performance.”

It was information from audit committee vice-chairman Carter that he and council based much of their decision to terminate Langlois, Francis said.

“He was the one who worked closet with him and Bill’s words to me were the situation was not salvageable.”

Zalev says the agenda for audit committee meetings gets set after discussions with administration.

“Everybody, administration, the auditor general puts forward issues they want to get on the agenda,” he said.

The action plan was not included in the Jan. 26 audit committee agenda because there were in-camera issues at that meeting which may have directly impacted the plan and auditor general’s office, he said.

“It was about auditing protocol, resourcing of the office and potential request for an RFP (for outsourcing),” Zalev said. “What had to happen was the in-camera had to be dealt with first by the committee. Until we knew what went on with the office and how they function, we really couldn’t deal with the work plan.”

Zalev said he doesn’t believe his role as both head of Enwin and the audit committee is a conflict of interest.

“If something comes up involving Enwin or the utilities in any way to be dealt with on the agenda, I take a look at the situation and deal with it appropriately,” he said. “There have been situations in the past where I have (declared a conflict).”

Zalev said the committee will examine whether it would be best if he and Carter switched roles as chairman and vice-chairman, but he said he has no plans to step down from the audit committee.

“I’m here, going to serve and add some value,” he said. “If council says to me ‘thanks, but you are not needed on the committee,’ so be it.”

He claims to have never laid eyes on the three-year action plan of Langlois that included an audit of Enwin until the night before the Jan. 26 meeting when the decision to keep it off the agenda had already been made.

“I never saw it before then,” Zalev said. “I didn’t know until then Enwin was on the list.”

The review of the Enwin-related companies was projected in the action plan to take the longest — at least 875 hours — and designed to review the company’s structures and operations.

Enwin embarked on a number of private ventures after the 1999 changeover that moved responsibility for overseeing hydro from the province to municipal entities and converted it into a for-profit venture. Many of the same board members overseeing the operation when the private ventures were launched are still in place today, including Francis and Zalev.

Among the costly ventures launched by Enwin was a private third-party billing operation which the utility felt could provide services to other utilities for a fee across the province and in the U.S. — but few customers came on board. It involved the hiring of dozens of employees and managers, new equipment and training.

The utility’s debt reached $104.4 million in 2003, but has since largely been recouped through rate hikes and belt-tightening.

Also included in the plan was a post audit review of the city’s 400 building. Langlois hoped to study whether recommendations for cost savings and efficiencies that were made in that audit were being applied to the new downtown aquatic centre. That review was already started by Langlois and was to come forward in March.

Another audit was to be done of the Windsor-Detroit Tunnel Corporation, which oversees operations for the Canadian side of the tunnel and is owned by the City of Windsor. In 2008, tunnel revenues — including tolls, rent and foreign exchange — totalled about $11.4 million.

Quoting a city hall source, The Star reported last week that the auditor general was fired because he refused to outsource his own office and that there had been complaints from senior staff about his conduct around the workplace.

But emails and reports from Langlois illustrate nearly a half dozen attempts over several months by the former auditor general to issue a Request For Proposals for outsourcing his office.

One of the those reports was also to be presented at the same Jan. 26 meeting. An in-house model with two senior auditors, junior auditor and clerk would cost the city $615,000 for 2012, while full staff outsourcing with a contracted firm could potentially cost $1.4 million to $2 million. The report, nevertheless, recommended issuing an RFP for outsourcing.

“They didn’t want that outsourcing report to go public because it showed the move doesn’t make sense,” Langlois said.

Outside auditors would charge rates of $400 to $500 per hour of work, up to triple for what in-house city employees receive, he said, citing the outsourced audit of the WFCU Centre as an example.

The city paid KPMG $170,000 to complete the WFCU audit, but Langlois said city staff had the time-consuming task of gathering all the information.

Langlois, a Windsor native, spent 20 years working in Michigan as an internal auditor for various auto-related companies and accounting firms that included General Motors, Ernst & Young and Deloitte & Touche. He also worked previously for Revenue Canada.

His hiring came amid years of turbulence within the city’s audit department that first saw former city auditor Mike Dunbar take early retirement in frustration over interference.

He was never replaced, but Angela Berry stepped up as lead internal auditor. In 2008, the city began its search for an auditor general. The job hunt was an endless process that resulted in an unnamed candidate being selected after 18 months. But when city council took more than six months to sign off on his appointment, the candidate said he didn’t want the job anymore.

Then last year, Berry took a leave, accusing city officials of creating a “toxic” workplace. She has hired a lawyer and has still not returned to work.

The audit search committee decided to hire Langlois over a year ago, but because of council delays he didn’t start the job until April.

In his previous postings, Langlois said he conducted audits around the world, but has never been through an experience like he has in Windsor.

“I’ve worked in Europe, Japan and in Egypt ... I encountered some difficulties but never this bad in my entire career — and it’s right in my backyard.

“These people made it clear they didn’t want my work going forward. It’s supposed to be administration, council and auditor general working together to make sure the information you are getting is good. It shouldn’t be this incestuous, three-ring circus. Everything we put forward was challenged. It shouldn’t happen this way.”

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